LEADERSHIP

Learning objectives

After studying this chapter, you should be able to:

Define the concepts of leading and leadership, and explain their significance to an organization
Identify the differences between management and leadership, and the traits of managers and
leaders
Identify the characteristics of effective leaders
Explain the early theories of leadership
 WHO ARE LEADERS?
WHAT IS LEADERSHIP?
• Leader is someone who can influence
others and who has managerial
authority.
• Leadership is a process of influencing
a group to achieve goals.

All managers are leaders?

• Yes, because leading is one of the
four management functions. Ideally,
all managers should be leaders.
 OVERVIEW OF THEORIES

EARLY LEADERSHIP THEORIES

• TRAIT THEORY
• BEHAVIOURAL THEORY
CONTIGENCY THEORIES
• FIEDLER MODEL
• HERSEY AND BLANCHARD'S SITUATIONALTHEORY
• LEADER PARTICIPATION MODEL
• PATH GOAL MODEL
CONTEMPORARY VIEWS ON LEADERSHIP
• TRANSFORMATIONAL-TRANSACTIONAL LEADERSHIP
• CHARISMATIC –VISIONARY LEADERSHIP
• TEAM LEADERSHIP
 EARLY LEADERSHIP THEORIES
TRAIT THEORY
• “Leaders are born, not made.”
ASSUMPTIONS
• The trait approach to leadership was one of the • People are born with inherited
earliest theories of leadership. traits.
• Some traits are particularly
• This approach focuses on the personal attributes suited to leadership.
(or traits) of leaders, such as physical and • People who make good leaders
personality characteristics, competencies, and have the right (or sufficient)
values. combination of traits.

• Leadership traits are considered to be enduring

characteristics that people are born with and that
remain relatively stable over time.
• Trait theory – assumes the leader is different from
the average person in terms of personality traits
such as intelligence, perseverance, and ambition.
 TRAIT THEORY OF LEADERSHIP
LIMITATIONS:
• No universal traits found that predict LEADERSHIP TRAITS:
leadership in all situations. • DRIVE

• Unclear evidence of the cause and • Desire to lead

effect of relationship of leadership and • Honesty and integrity

traits. • Self-confidence
• Intelligence
• Better predictor of the appearance of
• Job relevant knowledge
leadership than distinguishing effective
and ineffective leaders. • Extraversion
 BEHAVIOURAL THEORIES
• Leaders can be made, rather than are born.
• Successful leadership is based on definable, learnable
behaviour.

Description
• Behavioural theories do not seek inborn traits – they look at what
leaders actually do.

• Success can be defined in terms of describable actions.

Implication:
• Leadership capability can be learned.
 BEHAVIOURAL THEORIES

According to UNIVERSITY OF IOWA STUDIES

• The study was conducted by Kurt Lewin and his
associates

• The three leadership styles which are:-

1. AUTOCRATIC
2. DEMOCRATIC
3. LAISSEZ-FAIRE
 AUTOCRATIC LEADERSHIP STYLE

• An autocratic manager dictates orders to their staff AUTOCRATIC LEADER

and makes decisions without any consultation. • Rely on threats and
punishment to influence staff
• The leader likes to control the situation they are in. • Do not trust staff
• Do not allow for employee
• Quick and centralized decision making. input

• This type of management style can decrease

motivation and increase staff turnover.

• Structured set of rewards and punishments.

 SHOULD BE USED

• New, untrained staff do not know which tasks to perform or which

procedures to follow effective supervision provided only through
detailed orders and instructions

• Staff do not respond to any other leadership style.

• Limited time in which to make a decision.
• A manager’s power challenged by staff.
• Work needs to be coordinated with another department or
organization.
 SHOULD NOT BE USED
WHEN:
• Staff become tense, fearful, or resentful.
• Staff expect their opinions heard.
• Staff depend on their manager to make all their
decisions.
• Low staff morale, high turnover and absenteeism
and work stoppage.
 DEMOCRATIC LEADERSHIP STYLE
A COACH WHO HAS THE FINAL SAY, BUT GATHERS INFORMATION FROM STAFF
BEFORE MAKING A DECISION.

• Also known as participative style.

• Encourages staff to be a part of the
decision making.
• Keeps staff informed about
everything that affects their work and
shares decision making and problem
solving responsibilities.
 MOST EFFECTIVE
When:
• Wants to keep staff informed about matters that
affect them.
• Wants staff to share in decision-making and
problem-solving duties.
• Wants to provide opportunities for staff to develop a
high sense of personal growth and job satisfaction.
• A large or complex problem that requires lots of
input to solve.

• Changes must be made or problems solved that

affect staff.
• Want to encourage team building and participation.
 INEFFECTIVE
• Not enough time to get everyone’s input
• Easier and more cost-effective for the
manager to make the decision
• Can’t afford mistakes
• Manager feels threatened by this type of
leadership
• Staff safety is a critical concern
 LAISSEZ-FAIRE LEADERSHIP
STYLE
• Also known as the “hands-off¨
style.
• The manager provides little or
no direction and gives staff as
much freedom as possible.
• All authority or power given to
the staff and they determine
goals, make decisions, and
resolve problems on their own.
 EFFECTIVE
• Staff highly skilled, experienced, and educated.
• Staff have pride in their work and the drive to do it
successfully on their own.
• Outside experts, such as staff specialists or consultants
used.

• Staff trustworthy and experienced.

 INEFFECTIVE
• Staff feel insecure at the unavailability of a manager.
• The manager cannot provide regular feedback to staff
on how well they are doing.

• Managers unable to thank staff for their good work.

• The manager doesn’t understand his or her
responsibilities and hoping the staff cover for him or her.
 THE OHIO STATE STUDIES
INITIATING STRUCTURE:
• It refers to the extent to which a leader defines and structured his/her role and the
roles of group members in the search of goal attainment.

• It included behaviour that involved attempt to organise work, work

relationships and goal.
CONSIDERATION:
• It refers to the extent to which a leader had job relationships characterized by mutual
trust and respect for group members, ideas and feelings.
• A leader who was high in consideration helped group members with personal
problems, was friendly and approachable, and treated all group members as
equal.
Ø Effective leaders achieve both.
Ø A leader who was high in both initiating structure and considerations achieved high group task
performance and high satisfaction more frequently than who rated low on either dimension or both.
 UNIVERSITY OF MICHIGAN STUDIES
EMPLOYEE ORIENTED
• Leaders who were employee oriented were described as emphasizing
interpersonal relationships.
• They took a personal interest in the needs of their followers and accepted the
individual differences among group members.
PRODUCTION ORIENTED
• They tended to emphasize the technical or task aspects of the job were concerned
mainly with accomplishing their group’s task and regarded group members as a
means to the end.

Ø Effectiveness is associated with employee oriented leadership behaviors.

Ø Conclusion of MSU researchers strongly favoured leaders who were employee oriented as they were
associated with high group productivity and high job satisfaction.
Blake/Mouton Leadership Grid
• COUNTRY CLUB MANAGEMENT- (1,9)-
Thoughtful attention to needs of people for satisfying relationship
leads to comfortable, friendly organization, atmosphere and work
tempo.
• TEAM MANAGEMENT –(9,9)-
Work accomplishment is from committed people; interdependence
through a “common stake” in organization purpose leads to
relationships of trust and respect.
• MIDDLE OF MANAGEMWENT –(5,5)
Adequate organization performance is possible through balancing
the necessity to get out work with maintaining morale of people at a
satisfactory level.
• IMPOVERISHED MANAGEMENT-(1,1)
Exertion of minimum effort to get required work done is appropriate
to sustain organization membership.
• TASK MANAGEMENT –(9,1)
Efficiency in operations results from arranging conditions of work in
such a way that human elements interfere to a minimum degree.
 CONTINGENCY THEORIES OF
LEADERSHIP
• Leadership as being more flexible .
• Different leadership styles being used at different times
depending upon the circumstances.

• Suggested leadership is not a fixed series of characteristics that

can be transposed into different contexts. May depend on:
• Type of staff

• History of business
• Culture of the business

• Quality of relationship

• Nature of the change needed

• Accepted norms within the institution.
 FIEDLER’S CONTINGENCY MODEL

• The model was based on the premise that a certain a certain leadership style would be most
effective in different types of leadership.
• To measure a leader’s style Fiedler developed LPC (least preferred co worker)
questionnaire.
• LPC measured whether leader was task oriented or relationship oriented. Based on this Fiedler
gave three contingency dimensions:
1. Leader-member relations
• The degree of confidence, trust, and respect subordinates have in their leader.
2. Task structure
• The degree to which the job assignments are procedurized.
3. Position power
• Influence derived from one’s formal structural position in the organization; includes power to
hire, fire, discipline, promote, and give salary increases
FIEDLER’S CONTINGENCY MODEL
LPC questionnaire
 HERSEY AND BLANCHARD’S SITUATIONAL
LEADERSHIP THEORY

• This model also called as situational leadership theory(SLT).

This theory focuses main attention on follower readiness and
situation behavior of leader.
• Readiness is defined as extent to which people have the ability
and willingness to accomplish a specific task.
• SLT uses the same two leadership dimensions that fielder
identified- task and relationship behaviour.
• They go a step further by considering each as either high or
low and then combining them into four specific leadership
styles.
SITUATIONAL LEADERSHIP THEORY
Four specific leadership styles.
• Telling – (high task and low relationship)- leader defines roles.
• Selling-(high task and high relationship)- the leader provides both directive and
supportive behaviour.
• Participating-( low task and high relationship)- the leader and follower share in
decision making. Main role of leader is facilitating and communicating.
• Delegating- (low task and low relationship)- the leader provides little direction
and support.

Four stages of follower readiness

• R1- People are both unable and unwilling to take responsibility for doing something
• R2-People are unable but willing to the job tasks.
• R3- People are able but unwilling to do the what the leader wants.
• R4- People are both able and willing to what is asked of them.
 LEADERSHIP PARTICIPATION MODEL
• Leadership participation model related the leadership behaviour
and participation to decision making. Leadership styles:-
• Decide
• The model argued that leader behaviour must adjust to reflect the • Consult individually
• Facilitate
task structure- whether it was routine, non routine or in between.
• Delegate
• The model provides the sequential set of rules (norms)that the
leader followed in determining the form and amount of decision
making, as determined by the different situations and thus called
normative model.
 LEADERSHIP PARTICIPATION MODEL
• There is also a current model which reflects the how and with
whom decisions are made and uses variations of leadership Decision making contingencies:-
styles. Decision significance
• It also expand upon the decision making contingencies leader look Importance of commitment
Leader expertise
at in what leadership style would be most effective.
Likelihood of commitment
• These contingencies are either present (H for High) or absent (L Group support
for Low). Group expertise
Team competence
• Time driven model have short term orientation and concerned with
making effective decisions with minimum cost .
• Development driven model is also structured in the same way but
emphasizes making effective decisions with maximum employee
development outcomes and places no value on time.
TO USE THIS MODEL LEADER GOES FROM LEFT TO RIGHT.
 PATH AND GOAL THEORY
• The term path goal is derived from the belief that effective leaders clarify
the path to help their followers get from where they are to the
achievement of their work goals and make the journey along the path
easier by reducing road blocks and pitfalls.
• According to House, there are four different types of leadership styles
depending on the situation:

1. Directive Leadership
2. Supportive Leadership
3. Participative Leadership
4. Achievement-oriented Leadership
House assumed that the leaders are flexible and same leader can display
any of all these leadership styles depending upon the situation.
 CONTEMPORARY VIEWS ON
LEADERSHIP
TRANSFORMATIONAL LEADERSHIP
• Leaders who stimulates and inspire(transforms) followers to achieve extraordinary outcomes.

TRANSACTIONAL LEADERSHIP
• Leaders who guide or motivate followers to work towards established goals by exchanging
rewards for their productivity.

• Transformational leadership is built on the top of transactional leadership.

• It produces levels of employee effort and performance that go beyond what would occur with
a transactional approach alone.
• Transformational leaders were evaluated as more effective, higher performers, more
promotable, than their transactional counterparts, and more interpersonally sensitive.
• Transformational leadership is strongly correlated with lower turnover rates and higher levels
of productivity, employee satisfaction, creativity, goal attainment, and follower well being.
 CHARISMATIC LEADERSHIP

A charismatic leader is an enthusiastic, self confident leader whose personality and actions influence
people to behave in a certain ways.

CHARACTERISTICS OF CHARISMATIC LEADERSHIP

They have a vision

Able to articulate that vision.
Are willing to take risks to achieve that vision.
Sensitive to both environmental constraints and follower needs.

Exhibit behaviour that are out of the ordinary.

 VISIONARY LEADERSHIP

VISIONARY LEADERSHIP
The ability to create and articulate a realistic, credible and attractive
vision of the future that improves upon the current situation

• Visionary leaders have the ability to:

• Explain the vision to others.
• Express the vision not just verbally but through behavior.
• Extend or apply the vision to different leadership contexts
 TEAM LEADERSHIP
• Coaching
• The role of team leader is • Facilitating
RESPONSIBILITY • Handling disciplinary problems
different from traditional OF TEAM
leader. LEADERS:- • Reviewing team and individual
Team leaders should have performance.
skill such as: • Training and communication
• Having patience to share
information, Liaison with external
Coach
• Being able to trust others constituencies
• to give up authority
• Understanding when to Team
leader roles
intervene.
• Difficult balancing act of
knowing when to leave their Conflict manager Trouble-shooter
teams alone and when to
get involved.
 MAJOR ISSUES OF LEADERSHIP

• Managing power:- Legitimate, coercive, reward, expert

and referent.
• Developing trust:- Integrity, competence, consistence,
loyalty and openness.
• Providing ethical leadership
• Empowering employees
• Cross cultural leadership
• Gender differences in leadership
• Demise of celebrity leaders
• Substitutes of leadership
 Tutorial Discussion

1.Explain what is Managerial Grid Theory / Model by Robert

Blake and Jane Mouton. Using appropriate diagram, explain
the Blake and Mouton Model.
2.Explain Fiedler’s Contingency Model.
 Case study
The Indra Nooyi Style of Leadership

In 2006, Nooyi became PepsiCo's first female CEO, as well as its first CEO not born in the United states of America.
She was born and grew up in the socially conservative city of Madras (now Chennai), India. Her mother instilled in
her two daughters the belief that they could grow up to become whoever they wanted to be.

Nooyi described her early childhood years: 'Every night at the dinner table, my mother would ask us to write a speech
about what we would do if we were president, chief minister, or prime minister every day would be a different
world leader she'd ask us to play. At the end of dinner, we had to give the speech, and she had to decide who she
was going to vote for.' This ritual, according to Nooyi, has influenced and shaped her approach in the work that she
has done.

Her paternal grandfather, a judge, was another figure who helped reinforce her confidence. He would make her write
'l will not make excuses' 200 times on a piece of paper as a child if she was unable to do a task the way he wanted it
done. She became grateful for this practice when she grew older. When she first became a leader, she said men
would not make eye contact with her in meetings and would consistently check her answers with one of her male
colleagues. But rather than becoming disheartened with their attitudes, she began to call them out, and eventually
they began to realize she was very good at her job.
 Case study
She believes in being true and comfortable with herself without compromising her own principles. At work,
Nooyi always surrounds herself with mentors to discuss plans and she seeks advice. She's quick thinking,
intelligent and open minded, and does not procrastinate and sticks to her work until it produces the desired
result. At the same time, she is proud of her customs and culture. She sings and walks barefoot in her office and
wears the sari.

Most business leaders have their odd or unique habits that make them special. Bill Gates does the dishes every
evening. Warren Buffett starts his mornings with a meal from McDonald's. Indra Nooyi has the habit of writing
more than 400 letters each year to the parents of her senior executives. The letters are unique displays of
gratitude to her workers and team players. To her, her employees are treated as an extended family where their
needs and concerns are met to ensure the success of the company. 'Leadership is hard to define and good
leadership is even harder. But if you can get people to follow you to the end of the earth, you are a great leader.
As a leader, I am tough on myself and I raise the standard for everybody; however, I am very caring because I
want people to excel at what they are doing so that they can aspire to be me in the future.'

Source: Feloni, F., (201 5), "Pepsi CEO Indra Nooyi explains how an unusual daily ritual her mom made her
practice as a child changed her life", Business Insider
 Case study

1.Indra Nooyi has displayed a leadership style that is congruent

with transformational leadership. What shaped her leadership
behaviours?
2.Is the behavioural theory of leadership, where individuals are
taught to be leaders, described in the case study?
3.Describe two of Nooyi’s personality traits.
4.What is your opinion on Nooyi’s writing letters expressing her
gratitude to her staff ? Which transformational leadership
characteristic is being portrayed by her gesture?